anchor: stopped extending the gains in europe, lifted by the vote in france. president trump them and tax proposals. anchor: month -- next 's runoff a referendum on the block. betty: controlling asset bubbles. anchor: samsung's new phoneanchor: suffers teething troubles.

software updates for. to wi-fi. the world covered here on daybreak asia. we have the latest clues from fromboc and the boj, live tokyo and all the market moves in from hong kong. betty: we break down the latest u.s. earnings in new york from several of the major tech companies. of course, watching twitter for tomorrow. this is daybreak asia, coming to bloomberg's asia and europe headquarters. charlie: it is just after 7:00 a.m. in hong kong. i am yvonne man. massive risk on rally started in asia and swept through here as well as the u.s.. yvonne: it seems we are poised for further gains in the region. betty: it has come full circle back to the u.s. and now back over to you. as you had mentioned, new zealand and australia markets are closed today. u.s., it was all risk on, and the financials were

the leaders here. yvonne: yeah, that is take a look at how markets are trading in the asian pacific as you mentioned. australia and new zealand are closer today for the holiday. this is what japan teachers are looking like right now. it looks to be pretty positive, and we are set for possibly a fourth day of gains. dollar-yen, we have come back down a bit on that yen weakness. it is 109.81. we were hitting above 110. it looks to be a good day in tokyo for equities. that is an early look at what you can expect in the region this morning, betty. betty: let us take a look. let us bring up a chart before we dig deeper into the market on that whole reflation trade possibly coming back. take a look at the white line. that is a financials index on the s&p. end, quite a big spike up. some saying that, ok, it was

risk off. where was that reflation trade? it might be solidly backed on, particularly after these election results. joining us is su keenan with more on the trade today. su: it was a broad-based rally. that was right behind it. we go to the close. it was a 1% gain across the board. the gains have been bigger earlier in the session. if we look to what some of the big spotlight socks are, they say earnings are important. j.p. morgan chase, switching up some trading positions to strengthen their depth. that brought positive reception. ibm, big question going into the tuesy sessn on whether the the ceonual salary -- that for five straight years has had quarter after quarter of declining revenue -- is going to get that salary package approved. interesting question.

let us go into the bloomberg for the risk on, risk off index because it is clearly spiking higher in the wake of the french election. turning to commodities now, we saw both oil and gold. there is pressure at the french vote cut through the demand. fund managers have been piling into gold. what is the story there? su: we go back to where the statistics reflect before the election, you will see that hedge funds managers are piling into gold, looking at it as a life raft against the declining dollar. those positions are longer-term positions. they really reflect that gold has been doing well given all the geopolitical turmoil in recent weeks. concerned about whether trump was going to effectuate some of the policies he was talking about. later this week, he says he's going to give us the word on his tax reforms. that could further reduce

demand. we know there is a big possibility the government could be shut down and we could see gold spike higher on that. has been under pressure for a number of different asons. we look at the bloomberg once again and we need that in the week of the french election, we's the commodities of that on the out -- we do see commodities a bit on the out. we see more uncertainty by the end of the week? that is the question to revive the trade. anchor: thank you so much, su. we will talk about after the bell earnings as well. can you talk to us about what we'll be looking at? su: first of all, twitter will be a big story tomorrow. our tuesday session here, the question will be whether they can show subscriber growth. they will be facing headwinds of they cannot. let us go to t-mobile after the hours and talk about subscriber growth. it looks like they are picking up a lot of the verizon defectors.

the ceo for t-mobile saying he believes that verizon has a lot of problems out there because they have been getting the disgruntled customers. let us take a look also at newmont mining. somewhat flat. higher than expected adjusted earnings helped some investors. newmont is one of the world's biggest producers. we will have a spotlight there offalcoa kicking unofficially. earnings season, they came in with a strong report and they had a rally as a result not likely extends into tuesday trading. they came in with reaffirmed their fiscal year forecast. they believe the glut is being reduced somewhat and that demand for aluminum will continue for parsing -- 4.5% to 5%. anchor: su keenan joining us from new york. first word news with nina melendez. hello, yvonne.

details on president trump's tax plans are emerging. white house saying he will call for lower individual rates with or protects is coming down to 15%. onther details are due wednesday. the tax release will come as the white house and congressional leaders work on spending -- on a spending deal to avoid a partial government shutdown. marine le pen says she is stepping aside as france's national front leader, claiming she wants to be above partisanship in the presidential runoff. the vote being painted as a referendum on the e.u. and globalization. she is anti-euro and anti-immigrant, where as emmanuel macron wants more. supporters believe he will be good for europe. >> more europe is needed, not just for the monetary union, which is a player of european integration, but also to reassure european citizens that europe is about growth and jobs, something which europe has not been delivering very well recently on.

nina: samsung is releasing two software updates for the new smartphone after some users complained of red tinted screens and poor wi-fi connection through the device started shipping last week, followed by comments about the display. originally recommended users fix the problem manuly, but will nelson and an update. -- will now send an update. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm nina melendez. this is bloomberg. anchor: let us get to our top story in asia this morning. is the tide turning in china's sites to tackle the pilot bad pile ofthe banks -- the bad debt at the banks? kathleen hays has been going through his comments. the deputy governor said china's

outlook is improving. the question is why. kathleen: i'm so happy to be here in tokyo. i will be happy about that later in the hour. i'm certainly sorry i missed the deputy governor of the people's bank of china at a very important bloomberg form yesterday on international finances. infrastructure. rate, there is so much concern. talk to any economist about china and what is the biggest issue they face? they will talk about the the concerndebt, that these will bring down the japanese economy, but here is what yi gang had to say. much is getting pretty stabilized after a long time of climbing a little bit. kathleen: and you know, it is not just yi gang sounding or expressing optimism.

you take a look, at 10 is not performing loans dropped for the first klein since 2012. -- first decline since 2012. if you just see how the trend has gone, how there was this decline, and they are finally showing some relief. is justsomething that about the number two at the pboc saying it is getting better. our bloomberg data is supporting this. another thing to keep in mind that supports this or gives you a sense that maybe things are turning is that lasteek, we saw china's four biggest banks beating their estimates. one of the main reasons, all of those potentially souring loans holding steady, not getting worse. aegon washleen, a yi gang was optimistic. kathleen: i guess if you spend

$1 trillion if your own reserves to get your economy growing better, you maybe encourage a reverse loan, something that has challenge for china's government for the leadership. let us look at a chart, #btv 800 6. it shows the story. you can see it in the numbers and the trend that as gdp has improved, you can see the capital flows starting to turn around finally. this is a very important trend for china and of course, let us remind everyone that china's first quarter gdp grew at 6.9%, higher than the forecast. leadership is a mythic .5% annual target is within reach -- 6.5%rship saying that annual target is within reach. it is important now for the people's bank of china to manage any potential asset bubbles, to have a prudent policy and work on deleveraging.

here is what else he had to say. >> we tried to maintain economic growth and we try also to work process anding making sure that our lending and broad money supply has been growing inconsistent ways. -- in consistent ways. and of course, as you know, this has been a big challenge. a lot of technical tools being used now by the people's bank of china to manage liquidity in the money market, to pull some liquidity out at the same time and not disrupt borrowers, so gang sounding optimistic and a positive signal. we will see how it continues to

reverberate through the markets. china is such an important force right now in the global economy. yvonne: it is indeed. we will be talking much more about yi gang's comments him the pboc. we will discuss the bank's pledge of stability with citigroup's chief china u yi gang. li andne: what made his move on my lending. this is bloomberg. ♪

>> how to control the double is one of the important things we have to consider and also, when we consider monetarypolicy, we would like to try to manage the overall risk and preventing systemic risk. the pboc deputy

governor speaking at a bloomberg event in new york. let us get more on the chinese economy with citigroup's chief china economist. i want to welcome our bloomberg editor. a simple chart for our viewers to talk about what the deputy governor was saying when it came to bad debt. we do see the mpl's do so here in the last quarter. the fourth quarter, i should say, as we see the economy start to pick up again, above that 6.5% target. % for the first quarter. his nominal growth back up again? >> that is one of the important reasons. the nominal gdp has risen strongly. debt isult, we know

measured in nominal terms. it is cyclical. i do not think, structurally, china's mpl has more addressed. in fact, a lot of nonperforming loans in the banking system require aggressive privatization processes of the state owned enterprises. anchor: you know, go ahead betty. betty: so, i'm going to direct this question to robin. i want to pull up this chart that kathleen had shown earlier. it shows the capital flows. what is interesting is seeing that for the first time in a long while, robin, capital flows are coming back into china, so, given that, what does that mean for the yuan? does it mean we are going to see, despite what may be the pboc does or does not want to experience going to

a comeback in the chinese currency? have, so, e pressures as you lely pointed out, dropped off a little bit, but so far, it has mainly been a dollar story. the capital inflows we are seeing, you know, much of it has to do with these really very strict capital controls, .ontrols that the pboc imposes now, this does ease some pressure on the currency, and we no see the yua strengthening. what we have seen is that it tends to happen when the dollar weakens or strengthens. anyyuan seems to move opposite direction. if you look before the august 2015 devaluation, you see the yuan moving sometimes erratically, which we sometimes see today as well. yes, the inflows have eased pressure somewhat. at least the race to prevent outflows has slowed, but not

seeing a major benefit for the currency for the moment. anchor: no benefits for the currency, robin. aboutg was talking monetary tightening. >> i think the pboc has been you follow thet federal system. if the fed were to increase interest rate price this year, the pboc is very likely to follow. we have seen that over the last .uarter of the year pboc followed the federal reserve twice in raising interest rates. the other thing we have been regulator isthe now tightening china's financial regulation. regulationinancial and less monetary tightening as well. going forward, if the cbr see is cbrc is address -- the

going to extend the wealth products, we see liquidity in the fall financial system will start to tighten the yield in china. it will continue to rise. tightening,n this kind of close about back door and open the doctor when it comes to shadow banking and it is quite remarkable when you take a look at these entrusted loans or these funds which banks are kind of farming out to these managers andt hedge funds and now, the government is kind of cracking down on this. what do you think is the end game here? do you think it is a gradual slowdown or we're underestimating the risk of this big external credit event? liu: the end game for the financial system is to serve the real economy. that is what the pboc and the cbrc intend to do. during the process, they are the deleveraging should be

a gradual one. if it was too tight into aggressively, too fast, the real interest rate will surge. in the first quarter of this year, real interest rate has risen sharply. we think that this could china's realampen economic activity in the second quarter also. robin: i had a quick question. out, realely pointed interest rates have risen a lot. yesterday, we saw the 10 year yield rising. the question is, if you look at the seven-day repo rate from about 2.3% average year-and-a-half ago and now 2.9% point do you what think this starts to become a problem? what point of time? these are the risks for the pboc when driving up costs. liu: indeed. industryok at china's

profit rebound the last year, it was due to two things. one was the rebounding commodity prices. upstream firms, benefit founders, profit recovery. the other effect was real interest rates. see the upward trend of real interest rates, especially if you were to use cpi as a measure. china's real and just rate is rate to around -- interest -- betty: just before we go, i know we talked about this earlier, but i want to pull up another chart that shows you the rise of the shadow banking world in china. we talked so much about that and affecting the growth in china. this is, by the way, not the charge. guys, it is the pie chart that shows the rise in the bigger pie

the shadow banking has on loans. almost 16%. how much bigger could that grow to before it really becomes a significant risk for the chinese economy? well, i think at the moment, if you look at shadow banking activities, most of those products are offered by the formal banking system. we know most of those products have some kind of principal guarantee. in a sense, many of those products are not as risky as through the, but internet, finance company offering the financial product, it could be risky. i do not think those products will create a significant financial stress in the chinese banking system. aegon. the -- really gone.

yi-gang, thank you. this is bloomberg. ♪

yvonne: a record fourth-quarter profit thanks to higher earnings from petrochemicals and refining. a billionaireg chairman bankroll his ambitions in new areas. chief international correspondent for southeast asia is following all of this. a pretty stellar quarter there. >> you said it, betty. numbers beating estimates. net income up 13% to $1.2 billion. and refining 27% margin up $11.5 per barrel. this is the big positive

surprise. it is the ninth consecutive quarter of double-digit refining margins, and going forward, if you are wondering, that pace of growth is sustainable. you may not know of this. it operates the biggest oil refinery complex and has a refining capacity in excess of $1.2 million per day. reliance is able to pursue its new interests like telecoms. great potential to it also very competitive. it is offering free mobile services to its customers to establish itself. so no wonder analysts are saying to expect that business to be a drag on cash flows for the next two to three years, so that is going to put a dampener on earnings going forward. be watchingll reliance. thank you so much on their earnings results. how far are geopolitical factors affecting the yen's decline?

how much does the boj need a weaker yen? a closer look at that, next. this is bloomberg. ♪

anchor: it is a jury day. ; 30 a.m. tuesday morning in hong kong. we are 30 minutes away from asia's first major rket open. betty. betty: it looks bright in the markets turn 7:30 a.m. monday in new york. it did closed substantially higher. be an all clear for investor that the result of the french election over the weekend. i'm betty liu in new york. yvonne: i'm yvonne man in hong kong. you are watching daybreak asia. first word news with nina melendez. nina: china is calling for a restraint over north korea after discussions with president trump. the appeal comes as u.s. and

japanese forces begin turning trails and beijing urges all sides to avoid action that might increase tensions. pyongyang has dismissed the naval exercise as a prelude to invasion. they threatened a preemptive strike. selloff in chinese stocks has continued. the benchmark gauge something the most in four months on concern authorities will step up measures to restrict leveraged trading. the shanghai composite index all 1.4% at the close. its biggest one-day loss since december 12. authorities are taking advantage of the strengthening economy to reduce risk by tightening the screws on leverage. the london metal exchange is conducting a two-month consultation to revamp the world top base metals. published towas revitalize the exchange. chamberlain takes over as they open up to new users while

placating the concerns of traditional hedgers, traders, and brokers. toaysia has formally agreed a $1.2 billion payment plan to settle the debt of struggling state funds. receive the rest of it by year end. will assume the obligations. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 100 20 countries. i mean a melendez. this is bloomberg. i am nina melendez. this is bloomberg. a look at japan futures. it looks like we could be continuing this, sophie. sophie: it is a question of whether or not that rally willed by the french vote

have an effect on the asian session. take a look at how contracts are set to open when we see the major market open at the top of the hour. we're looking at a fairly flat session for nikkei futures as on monday.225 closed that is looking steady this morning after monday's declines. take a look at what is going on elsewhere. we are looking at the kospi opening higher as well. we are going to be wondering what china will look like. i will get more into that later. i want to show you what else has been happening given the french vote rally we got. it was very much good news for the euro here, the common currency holding on to its biggest gain since june. it had its best open on record. stocks,tioned, chinese we're having to watch for -- we will see whether or not the route in china continues here to maybe change the value. the shanghai, fell by the most for the first time in

more than 80 trading days. it closed below the 200 day closing avage -- moving average. the benchmark has flen 5%. that is making it virtually flat for the year. that has brought the correlation between chinese stocks and global equities to a near zero. so far, it has been contained, but as mark tinker cautions, we should not forget what happened two years ago. there is a risk of contagion looking low as on as people don't start confusing the stock market with the economy. one must point. earnings season, very much in full swing. overnight, we had caterpillar shares rising after halting a four-year sales slump. commodity rebound is bearing fruit as the construction and mining equipment maker got a boost in asian sales. we will keep an eye bang on komatsu shares.

-- eye on komatsu shares. the weakening helped stocks of japanese exporters. how important is it to the reflation battle? kathleen hays joining us now from tokyo with more. --hleen, what are we likely what does this set us up for on thursday, here in what is coming out from the boj? ofhleen: while, this is one the meetings where the bank of japan releases a monetary policy report. toernor kuroda spoke governor kuroda last week and seemed to lay out the case of what we are going to see expressed in that report when it meetingt at the on thursday. he will be holding a press conference that basically what was interesting, he does see inflation moving toward the 2% target but it knowledge is quite

openly that yeah, if the yen if is not week, it did so our progress to that target. let us remind everybody why the week yen is so important. it boosts exports, right? you could sell more of them and big manufacturers are one of the biggest part of japan's economy, driving it forward. if they sell more stuff, they get more confident, they make more money, and maybe invest more money. all of this, i'll positive for the economy. moving ahead, helping boost wages that could increase the dynamic. the opposite side, north korea. tensions are still there. risk is back on and that helps the yen briefly, but north korea tensions are staying. they probably put a floor under how much it can weaken at this state. #7758. you will see a lot of activity. that yen point is very

important. you can see the spot rates, the moving average, and the green line which shows you that 110 level and a break below the level could be a sign for yen bears. bottom line, governor kuroda is stressing not just the yen. he putting a lot of importance on domestic dynamics that are driving inflation higher this year. that is what he is looking for. anchor: you know, we have a lot going on here today when it comes to north korea as well. i'm sure all the yen traders will be watching that with the 85th anniversary. we could be seeing some type of missile launch or kind of nuclear test. that is definitely want to watch r the yen, but does that mean where it goes from here?should governor haruhiko kuroda optimistic? be too

kathleen: they have every reason to be as skeptical as everybody and they see the core cpi measure for japan hitting 0.7% this year, and that would be quite a bit of progress from where we are right now. japan is at 0.2%. for this, we're going to look at this chart. -- bottom line there is progress. another thing i want to point to is the labor market. in fact, governor kuroda mentioned this when he spoke to bloomberg tv last week. the labor market is strong, jobless rate is low. gp going above potential. let us look at #5407. there is a little fly in the economic ointment. you can see this chart. you see wages going up, that is great, but look at the bottom of the chart.

getting more negative. for some reason, japanese consumers are not confident enough to spend more. this is something the bank of japan would like to see. one more point to make outside of governor kuroda or anybody's control. the cuts, can they maintain ?hem, can they invest traders maybe heading toward $60 per barrel. that is something i'm sure governor kuroda and his colleagues at the bank of japan would be very happy to see. anchor: kathleen hays joining us live from tokyo ahead of the boj decision. coming up, a quick f. an early software update after microsoft users complained. details and reactions from seoul, coming up. this is number. ♪

anchor: this is daybreak asia.

i'm betty liu in new york. yvonne: i am yvonne man in hong kong. the internet giant controlled the online messaging service is expanding into china's highly competitive simtech sector. they discussed those plans in an exclusive interview with tom mackenzie. we believethe area we will have a lot of opportunities, but this is a long shot. i mean, we need the patient's in this area.ience in originally, there is a lot of new companies coming out in the market, but now as the market becomes more normalized, regulated, then you were talking about different license requirements and different kinds of regulations we have to follow, so it is a combination of how we fit in the regulation plan in terms of growing the business.

we are making pretty good progress in that area and we are going to form a company that is going to be focused on financing, which will actually, based upon the strength we have on these platforms, that we have big dollar money invested in this area. >> how much are you setting aside to set the company up, and what is the timeline for that? >> it is already in the process, and i'm not going to talk to much about the dollar amount. we do have a big dollar amount investment in this area. >> how concerned are you about the increased focus on the government on that? >> i think it is inevitable. in china, it is always the case that it is not too much regulation. people,ountry, a lot of it is too little regulation at the beginning, and so, that is

why you have a lot of people, a lot of companies with new eras. in my view, that is good, being aware. a lot of people try different innovative methods and doses.ity's to create it creates a lot of problems, right, so once the regulation and the government to the progress, they will jump in and say you have to slow down and you cannot do this or that so much, and this is good for i think the long-term because you cannot allow that kind of chaos to continue. 'schor: that was sina chairman. that is get a quick check of business flash headlines at this hour. the u.k. will have to settle at $2 billion european charge for customs fraud before any brexit deals can be agreed to.

it relates to claims that britain has failed to prevent dodging taxes. the u.k. ioses ler duties on clothing and shoes than other countrs, allowing them to make a profit. softbank is said to be close to an investment in london-based pr a london-based vr starter. horowitz and has raised $20 million so far. the company creates what are called hyperrealistic the virtualin world pure netflix is leaning on european investors at the prepares a marketing push to attract new subscribers. it is planning a first eurobond shareshere sources say will be sold. proceeds will be used for contact, x manager, and

potential acquisitions. netflix missed estimates for user growth because -- yvonne: that is right. the chipmaker here was a beat for the bottom and top line. let us go to operating profits. 2.4 7 trillion won. 2.47 trillion won. for 5.9 8te was trillion won. looking pretty good when it chip business. we will see how things play out when it starts trading in the 8:00 hour. betty: it is also one of the bidders for toshiba's unit. let us talk about samsung now. samsung releasing software updates. tintedomplained of red

greens and body wi-fi connections. peter ahlstrom interview. peter, first described the issue to us. what happened here with the phone? so, samsung released this phone last week. people the ordered the phone and they began to complain that in some cases, they were seeing a screen that was tinted slightly having issueswere with this. samsung said there were ways to adjust that manually on the phone and it originally left it at that, but last night in a statement to bloomberg news, they said they were going to it issue software fixes so the color issue could be addressed directly. weren't trouble is connecting to certain wi-fi networks, so they are issuing a software fix for that. s8s of course comes with the phone.

it follows the troubles they had with the note 7 phone where they had battery problems. any kind of glitches that they had with the new version of the phone are being closely watched. people want to see whether they got everything right this time. anchor: you know, everyone saying this is the crucial time. they have to get this launch right. if we did not have the note seven debacle, we are used to some of the bugs in the initial phone here at how might this affect samsung and its image then? peter: samsung has been chugging along quite smoothly throughout this crisis and the heir apparent at the company is right now on trial in south korea on allegations of bribery. despite the note seven fiasco, the company's has been very strong. the stock reached an all-time high earlier this year. samsung makes many things besides smartphones.

those businesses have been strong. even with the note 7 problems, have been able to do pretty well on the business side. there are hopes with pthe want to see whether samsung can recover and get back on its feet in the smartphone business and complement those other businesses they have got. anchor: we talked about all the hype leading up to it. preorders were at a company record from the get-go. do you think they can continue on with the momentum given the hiccups we have seen? peter: the key thing is going to be whether this glitch is the last one with the phone. they issued a software fix to address this problem. the phone has gotten quite strong reviews and it should do pretty well, particularly in markets were samsung is strong, including south korea and the u.s. and other markets around the world. if there are additional

problems, that will be a bigger issue for samsung. anchor: hopefully, it is just a quick fix. peter elstrom, thank you. fory's edition of daybreak bloomberg subscribers, just go to dayb o> on your terminal. we are still talking about the french elections today. it is available on your smart phone and bloomberg anywhere at. you can customize your settings, look at the news and industries and asset you care about. make your you check it out. this is bloomberg. make sure you check it out. this is bloomberg. ♪

anchor: this is daybreak asia. i'm yvonne man in hong kong. betty: i'm betty liu in new york. president trump pledging time and again during the campaign, as many presidents have, to rebuild america's crumbling infrastructure. now, he has an nba legend backing him up. at a bloomberg isn't in new york, we asked nba star turned

entrepreneur magic johnson why he wants to be involved in infrastructure in the u.s., and how he is forging a special relationship with the chinese to do just that. been an investor that looks to invest in things that are in demand. and right now, one of the hardest things, not just here in america, but in the world, is infrastructure. purpose is my main not only do i want to turn a profit on that, but i want to make sure women-owned businesses and minorities get a chance to participate. a lot of times, we are locked out of deals like this, and so, jim and i come in together. we want to make sure that yes, we partner with the greatest companies in the world to make , if it is a airport, it is

a great new airport, roads, seaports, on and on and on, and that minority get a chance to have contracts. and so, i'm excited about infrastructure because this is going to happen for the next i think 20-25 years. we are going to be rebuilding america, basically, because we have so many challenges, when you think about infrastructure. odd, yvonne, to see magic johnson talking about infrastructure. [laughter] betty: the china angle to this is the investment company he has jlc is actually looking to the chinese to bring .ome money in they are working as a conduit with bank of china. they have a trip planned where

they are going to meet with anbang insurance and other companies to partner with them to bring chinese money into u.s. infrastructure. so you know what, in business, anything can happen, right?if you can dream it up , you can make it happen. [laughter] yvonne: you know, he said he's in it for the long-term. if a structure for the next 25 years in the u.s.. also, we heard from the treasury secretary talking about how we could be getting a little bit more details in terms of president trump $20 billion for structure plan. in then track to have it coming months. the question is how they would pay for it. they said they would be relying on public funding and public-private partnerships as well. continue to watch about one in the coming weeks or so. watch that one in the coming weeks or so. caterpillar jumped in the most in more than one month after sales on a three-month rosing basis rose for the first time since 2012. the world's biggest maker of

contraction and mining equipment has the asia-pacific to tha nk. if a talking about structure, that is what is happening with caterpillar as well in china. that is why there fortunes -- their fortunes are rising as well. we are seeing machine sales rise. i will show you the financial analysis function for caterpillar. what you're seeing here in these orange bars are machine sales over the past four to five years. at theirwe saw them peak. they have been falling since then all the way through 2016. what is happening here is what is happening in china in terms of some infrastructure. let us take a look at what is happening in terms of the whole entire global kind of outlook here. 1% is what we are seeing in terms of the rise for machine sales. just missing above the 0% mark. the last time it was about that mark was in 2012. four or five years or so ago.

breaking this up to the regional perspective now, we will see that the world was 1% in north america, latin america, europe, the middle east, -- latin america down the most. where is the growth, 46%. that is the asia-pacific. betty: what does this mean for the mining industry than? -- then? ramy: potentially, this could be a bellwether. if you take a look at the spider etf that looks at minors, it has been on the downturn ever since 2012 and into the start of 2016, but we are seeing this rise in 2016 into now, and we are seeing this little bit of comeback that we are seeing also in terms of what is happening with caterpillar here. it is not so much about mining, betty. it is more about construction, as i alluded to earlier. construction in china. china's first quarter gdp saw a record number of starts in terms of long-term construction, so we are looking ahead to that. we will see how we at it is

happening in terms of japan's komatsu and other construction makers in asia. yvonne: ramy inocencio on caterpillar. caterpillar is doing well in

yvonne: asian market set to extend gains. that euro hangs on to its biggest advance since june. he pboc wants to control asset bubbles. yvonne: sansone's new phone suffers troubles. tinted screens and dodgy wi-fi. toty: north korea threatens attack an american war threat --

war ship. yvonne: this is the second hour of "daybreak asia." in hong kong. in newi am betty liu york. it is just after it :00 p.m. we had a big rally in the u.s. and we had financials leading the way. looking quickly at the open here in japan, looks like it is opening slightly in the negative. certainly some other factors to watch in asia aside from lingering risk of fact from the french collection -- election. yvonne: they're waiting for some sort of tax reform coming out by the trump administration by wednesday. officials are saying we could see trump cut the corporate tax rate to 50%, what he promised during his campaign. also, north korean concerns as well.

we could be seeing geopolitical tensions flaring up today. let's get to the market open in tokyo. >> we could be seeing a shift when it comes to investor attention and anxiety over the french election. 225 looking flat at the open. we do have the yen trading steady after the clients in the wake of the french vote. we do have european equities jumping to a 20 month high. s&p 500 climbing the most in two nths. jock -- german bonds fell along with u.s. treasuries. 10 year yield for u.s. benchmarks at 2.7 percent after rising 2.2% on monday. on the lineup we have corporate earnings. boj policye

decisions later this week along with potential tax plans from trump. let's look at the currency front, we don't usually talk about the canadian currency, but it is down at about .3% after reports that trump might impose import tariffs on dairy products. we also have the mexican peso being affected because traits at -- trades must be trilateral. we also have the korean currency snapping a four-day rally despite the cost be up by .1%. picking uptraits after sliding on monday. in the commodities space we do see the commodity index headed for the longest losing streak since the end of march.

we do have oil rising after six straight days of losses. iron or continuing to slump. i want to look at how futures are panning out so far. taking a look at this last column. we do have u.s. futures looking slightly weaker. take a look at the full screen, you have to ask a high makes inixing is written --h training down .6%. commodity -- komatsu gaining thanks to a rebound it's on asian sales. that gives you a sense of how the earnings picture is faring so far. betty. betty: thank you so much.

let's get to the first word news. details a president trump's tax plans are emerging. the white house says he will call for individual rates with the corporate tax coming down to 15%. further details are due on wednesday. the final proposal is not expected until june. the release will come as the white house and congressional leaders work on a spending deal to avoid a partial government shutdown. the president is ready to slap a 20% tariff on products from canada. the latest move in a trade dispute between the countries. , and at ahouse reception for conservative reporters. trade day talk expired on october and there is no replacement on the horizon. china is calling for restraint over north korea after discussions with president trump . the appeal comes as u.s. and

japanese forces begin joint drills and beijing urges all sides that they should avoid actions that increase tensions. actionsg has called the something that might trigger an invasion. pen says she wants to be above partisanship on the presidential runoff. as aote is painted referendum on the eu and globalization. she is antihero and anti-immigrant. macron once closer european integration. his critics say he has no clear policies, what supporters believe he will be good for europe. >> more europe is needed, not just for the monetary union, but also to reassure european citizens that europe is about growth and graz -- jobs. something that they're not been delivering well on recently.

>> global news. 24 hours a day. powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. asia, the story in toe turning in china's fight tackle bad debt at the banks th pboc has been talking about debt at a bloomberg conference in new york. our economics and policy editor has been going through comments audience. an the deputy governor is saying that the debt outlook of china is improving. is it really improving? >> the numbers that have been released from china on nonperforming loans, the economy, bank profitability -- all of those suggest it is. he was speaking at a bloomberg forum on international finance and infrastructure at bloomberg world headquarters in new york.

we know that this question of debt a mountain -- a mountain of debt as some call it is a big concern to economist who say that china cannot get out from under that debt until it takes more steps. steps to slow down the process and move toward consumption. he was upbeat. here is what he said. it is getting stabilized of climbing aime little bit. betty: stabilization has got to be a big lead in china because the problem was getting worse and worse. the nonperforming loans trap for the first time in the fourth quarter. the first time since 2012. let's take a look at a chart. 7289, you can see how that trend has been higher, higher, higher.

the fact that it is stabilizing, the big question is this an actual turnaround? china's biggest banks be profit estimates. they were talking about potentially souring loans holding steady. , if it is ave yet brief respite or a trend that will continue. but if the economy is growing, that should be double to the banks that are holding these debts. bit of ahere was a turnaround when it comes to capital outflows and inflows connected to china recently. it has been a challenge when it comes to capital outputs for policy makers. he was pretty optimistic about that. >> he thinks it will continue. things have turned around. i am breathing a sigh of relief now and hoping that this will continue. better there will be investment of -- opportunities

at home or make a difference. spending to stabilize currency in 2014 out -- offset these outflows. 006, you can see how the tide has begun to turn in terms of the blue line which is gdp monthly estimate. it does not exactly match the yearly figure we got. the first quarter number was 6.9%. we just got that last week. the green line is showing how the capital flows have turned around. a very important development. a very positive sign. , people'se said now bank of china has to follow prudent on a terry manage any asset bubbles that might exist, and look at deleveraging and trying to manage that too. >> we try to maintain economic

processnd work on the and making sure that our lending and brought money supply has withgrowing consistently deleverageage -- reform aspect. betty: it is interesting that so many central banks around the world are trying to figure out how to taper off on their bond purchases and get inflation to rise. that the pboc is dealing with complex issues. they are applying a lot of tools to deal with this. at this moment it seems that on the face of it, the numbers would say that the optimism, the upbeat outlook, that at least things are not getting worse and maybe getting better is justified. yvonne: thank you. still ahead, north korea

announces u.s. and japanese joint military drills. beijing urges restraint. we will have the latest on those regional tensions later in the show. betty: up next, the risks and rewards of operating in china. we talked to someone from the u.s.-china business council. this is bloomberg. ♪

betty: this is "daybreak asia." it quick checko of the business headlines. softbank is close to an .nvestment in a london company sources say a deal might be reached this week. it is not clear what the size is. it is backed by u.s. venture capitalists. they have raised $20 million so far. the company creates hyper

realistic simulations and virtual worlds. top bank shares up .7% this morning. atty: caterpillar snapping sales slump. sales rose 1% through march. compared with a 1% fall in the. through february. shares surging thanks to trump's infrastructure promises. caterpillar remains cautious. yvonne: a financial company is planning to build mergers and acquisitions teams in europe and asia to attract new businesses. has an 80 person strong team based in new york. it will help lending and revenue streams. the shares are up .8%. betty: its a $400 billion market for the u.s., but

american companies are finding it tough to do this is in china. let's get to beijing and bring in the vice president of the u.s. china business council which represents over 200 american companies. first off, what is going on here? what has changed? what is making it hard for you in china right now? >> what we see from our member companies is that while china's top line reform rhetoric has promising, the reality is the action and implementation of -- has fallenked far short of what the rhetoric has suggested. our company continues to see china as an important market, $400 billion. the question is whether it is a place to do business or if they can affect growth the way that they should be. to try tolike quantify this in numbers and in charts. we do have this chart. let's bring it up. it shows the ease of doing

business in china index. we have an index that measures this. it has been falling quite dramatically over the last several years. this easiness that had been a parent before is falling. it seems to support what you are seeing. can we drill down further? what has gotten harder? mor red tape? what is it exactly? >> what we hear from our companies is that there are multiple aspect. one is the economic reforms and not being able to invest in certain sectors are it we have also seen rising domestic competition. additional pressure on margins, labor cost increases. china is mimicking other mature markets. revenues are looking at it in that way now. talking about higher

taxes as well. not being able to find employees in china to fill some of those jobs. is the trump administration going to be able to move the dial? we have seen anti-trade rhetoric -- even though it has died down a bit. we heard president trump say that he would be ok making trade concessions if china does help them in terms of reining in north korea. >> we think president trump is doing the right things. ,he china relationship particularly on the economic side, is extremely complex. he is taking time to study steps you can take. many of the things he mentioned during the campaign would have been counterproductive. he did not label china a currency manipulator. we think that is the right way forward. the question becomes one of whether china can move forward with these domestic economic

reforms during a. of political transition domestically, even though the rhetoric is positive, if he is able to leverage some of the bad influence in the china market, we think there is an opportunity for making the business environment a little easier to engage in going forward. what could happen if we don't see china creating this level playing field for u.s. companies? we have already seen backlash when it comes to chinese outbound and in a deals. m&a deals. i want to throw up a chart that &a investment to asia. it is at 16.5% right now. apparently 2011, that box was much bigger, nearly 40% into the asia-pacific region in total,

including china of course. if we do not see this type of change from china, will we see more backlash and more u.s. businesses leave the chinese market? don't think we will see any u.s. companies leaving the china market. china asy data shows an important market. it is the top priority for emerging-market, all of them. the question about what actions might be taken if china does not move forward, we know in the united states there is pressure from congress and the executive branch to increase the investment parity and the ifationship of reciprocity we can invest in certain sectors, we should look in chinese investment in the united states. that has come up. that is an area where we are looking as well that might be an opportunity. a leverage point in the relationship going forward. betty: usually companies try not

to speak out too much or try to keep their comments behind closed doors. they want toause keep doing business and they want to grow there. why are companies now speaking out? it seems like more and more companies are speaking out more publicly to are doing business in china. why is that? why do they feel more bold to talk publicly about these difficulties? haveer the years companies seen the china markets and the commercial relationship between the u.s. and china as being the ballast of the overall economic relationship. they continue to grow in china, however there are challenges here, the tech sector in particular. the information technology environment has deteriorated significantly in the past year. national security is increasingsed for

protections purposes, for in china.rocurement we have seen red tape and lingering investment restrictions, not moving forward in the direction we want to go. the rhetoric that has raised our companies expectations for what to expect in the china market has not met with the actions and -- elimination of what it implementation of what it expects. all those factors are making companies more vocal when the terms to speaking out on china. yvonne: great to have your perspective on this. thank you. coming up, seeing red, customer complaints about the new s8 screen and wi-fi. we will check the reaction live. this is bloomberg. ♪

yvonne: this is "daybreak asia."

betty has some breaking news. cvc capital is teaming up with a catchy to make an offer to buy landis and gyr from toshiba. it is worth $2 billion. i'm clear what cvc has offered. toshiba shares are at 2.2%. this is on the back of toshiba saying they would be splitting into 4 separate entities. this is the company that focuses more on energy efficiency. they are trying to get 100% stake here including toshiba's 50%. they may remain a shareholder though. betty: we will be getting more headlines like this as more

companies, to bid for the assets of toshiba. let's move on to samsung releasing software updates for smartphone after users have been complaining about screens and spotty wi-fi connections. this was supposed to go smoothly, right? samsung could not have any missteps here? >> that is right. they had the ds go with the note 7 smartphone. the galaxy s8 smartphone was supposed to put all those problems he hide it. it launched the phone last week and began shipping it last week. consumers saw that the screens were somewhat red. customers voiced complaints. at first, samsung said consumers could adjust the screen tent themselves and they were not going to do anything about it. theynight they told us were going to issue a software

fix so that they could adjust the screens and a medically. of connectingso to some wi-fi networks. there is a fix for that as well. yvonne: is it a big deal? >> samsung has a lot riding on this phone right now. of the note 7 was a big setback for the company. it gained so much ground and was one of the leading players in the industry along with apple. it was a big setback. they had to pull all the phones off the market. they missed an entire cycle of a smartphone generation. it was a very well reviewed phone. s8 is supposed to put those problems behind it. it got stronger views. apple is coming out with its next iphone later on this year. it will be the 10 year anniversary phone. samsung needed a strong showing to demonstrate that it is back in the game in smartphones.

yvonne: thank you. i want to add to that news headline, cvc teaming up with gyrchi to buy landis and from hitachi. ♪

>> we are half an hour away from the open of trading in same or -- singapore. betty: you are watching "daybreak asia." let's get to the first word news. china's pocys ve been struggling with capital outflows for the past two years. the central bank says the pressure has eased as the currency stabilizes. speaking at a bloomberg at that in new york, the pboc would pursue prudent monetary policy while controlling asset bubbles. he pledged to improve

transparency. >> what i have done in my is removingave done the existing barriers and trying to cut off red tape. and the dollarr and euro transactions easier to make the currencies compete equally. has helped a chips u.k. producer post the best earnings since its founding. at $2.2g profit came in billion. sales also improved beating expectations. shares opened hire but slipped back and are now flat. chinese stocks have continued. consumer authorities will step up measures to restrict leverage

trading. its biggest one-day loss since december 12. authorities are taking advantage of a strengthening economy to reduce risk by tightening screws on leverage. malaysia has formally agreed to a 1.2 billion dollar payment plan to settle the death of struggling state fund. the sovereign wealth fund will receive cap that by the end of july. the rest will be paid by year end. the filing in london says they will assume the coupon and principal obligations for $3.5 billion which were guaranteed by the company. global news. 24 hours a day. powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: thank you. time to see how the asian markets are shaping up this morning. half-hour into trading in japan and soul.

sophie. sophie: japanese markets are swinging into the green. the nikkei 225 is 60 points shy of the level here. the yen is steady and helping out. financials materials and energy stocks are leading gains. let's take a look at some of the equities in particular. pull up the full screen. it is rising as much as 5% after preliminary numbers be forecast. yamato gaining after reporting it would raise delivery rates by 5-20%. toshiba rising for a second day after cvc is said to team up with hitachi to buy its energy services unit, landis. the yen is looking strip -- steadier against the dollar. this is after depreciating as much as 1.4%, the most in three

months on monday. we are also seeing volatility dissipate to a one-month low on monday. saysead of money trading it was cap at 110 and risk is not entirely faded. for the dollar yen, it has below 108. there are three factors to consider. french election,-tensions over concerns overnd the u.s. interim budget being passed. not all risk out of the way. that is it for now. betty: let's look at the yen. yen showing losses after the first round french election results. how important is it to be reflation battle? kathleen hays joining us now.

i can't say there is a lot of great expectations on what the boj can do, right? is, what the question more can the boj do in terms of policy steps to stimulate the economy more than it already is with buying lots of bonds and keeping the 10 year note yield around zero. that is called yield curve control. a long slown process. if you are skeptic or eight pessimist, you say the bank of japan will never get there. they should drop it to 1%. governor kuroda and his colleagues are convinced they are headed in the right direction. let's remind everybody why the week yen is so important. if your yen weakens or your currency, then you can sell your goods more cheaply overseas. you mentioned how the weak yen was helping japanese exporters. the biggest companies in japan

rely on their exports. if i can sell more stuff overseas, i make more money, they get more company, maybe i can invest more money and hire more people. it can feet higher wages and higher prices, that is what the boj once. on the other side, north korea. the potential there will prevent the yen from making full support at the 110 rate. let's look at a chart. it is exciting right now. yellowwhich you see is a line, the 200 day moving average. fibonacciline is a retracement. it is 109.80. the yen has tried to break through that level but it did not make it. the question is, which way is it going to go? arechart shows, if you

traitor, this is what you will watch. governor kuroda is not depending on a weak yen. japan can head toward the target even if the yen get ronger. he is looking at domestic dynamics, the economy getting better to be the fundamental reason japan will make progress. the inflation optimism justified? kathleen: bloomberg intelligence in tokyo agrees that inflation is improving. it will be sometime before it gets to 2%, but they have a reserve which is the overall number. let's look at a couple of important dynamics. let's look at trade, the trade surplus has been improving. 017, and you see the surplus is in the green again. risemists say a lot of the in imports is because of oil

prices. if you want to see that trade surplus keep improving, it oil does not get too expensive, that could be a plus. the other part of the economy is, the plus is unemployment. wages are starting to ride, spending is the other part of it. you can see when i was talking about. the jobless rate continues to fall. governor kuroda talked about this last week when he talked to us. this is a positive sign. the wages are starting to rise. look at spending, it is still negative and is getting more negative. this is something that boj might reference. decidehey meet and probably to do nothing, the question is will they raise the inflation forecast? bloomberg intelligence is saying no. it will also be interesting what they say about energy pric. that is amething plus, not necessarily because

they want to see people pay more to perform you'll and their cars, but because hopefully it feeds into inflation. they are hoping to see inflation expectations rise, something that is very important to boj right now. we will see when we get the monetary policy report on thursday afternoon. we spoke to an who said inflation expectations are falling. that withe more on the boj meeting coming up this week. thank you. president has urged restraint over north korea after a phone conversation with donald trump. the u.s. president also spoke with japan's prime minister. let's get to our asian government editor with more on that. great to have you. this is the second phone call that the chinese president has made with trump.

this comes as the u.s. and japan begin joint naval drills. reporter: two things are going on. what is the show of force, showing off our military presence. japan is doing an exercise. south korea is considering an exercise, which the north would also view as a provocative act. trump calling the chinese president for the second time in two weeks. this morning everyone was watching to see if north korea will go ahead with the nuclear test. if they do, what is likely the response? reporter: we have seen a lot of editorials in chinese state-run media warning north not to do this. that if you do this, china will support the most severe united nations sanctions. the chinese president does not want trump to go outside of the

take unilateral action, which means a military strike, which could unleash a terrible war throughout the region. but he has signaled that warning the north they will cut off fuel and food, the things you need to survive, we will actually do that this time. that is one possible response. yvonne: it comes at a time when china and north korea relations have been chilly. we see how the state back media goes against each other. reporter: you don't see this very often. normally they are in lockstep. the chinese do not say much. they have been firing back-and-forth. they are saying they will not be intimidated, but the chinese are saying do not pay attention to what casey -- is saying. trump is serious and he is making this a top foreign-policy

priority. beijing is sticking to this. they think they have the leverage over north korea to make a listen. yvonne: thank you, our asian government editor. coming up, we will take an in-depth look at reliance is numbers. this is bloomberg. ♪

betty: let's get at quick check of the business flash headlines. netflix is preparing a marketing push to set -- attract new subscribers. used forwill be content, capital expenditure, and potential acquisitions good netflix ms. estimates for user growth because it lacked a current t series. pvc industry says it might launch a takeover of another

company. ceo told bloomberg he will take the proposal to investors if there is no agreement by june. shareholders meet on wednesday. some are in favor of the deal, including elliott management. the world's most viable distillers first quarter profit raise 25%. it takes advantage of chinese consumers shifting to more expensive drinks. it climbed to $890 million through march. $1.9ues surged 47% to billion. they're aiming for 15% revenue growth. --nkers go more of stale in more upscale injuring potent stuff. caterpillar jumped the most in more than a month after sales on a three-month rolling aces rose

for the first time since 2012. the world's biggest maker of construction and mining equipment has the asia-pacific to thank. ramy inocencio has the details. finally, asia is becoming a performer for caterpillar. ramy: caterpillar has been needing this. for five years ago, sales in terms of machines have been falling every single year. asia-pacific is coming in to save the day at least in his first quarter of the year. let's take a look at what percentage is this. it is not a big percentage. taking a look here in terms of the sales from 2012. you can see sales lling every single year. let's go ahead to a line chart and i will show you the ball we saw in the overall percentage. it is not a big percentage. it was only up by 1% in the past three months. in the three months until february, it was down 1%.

this is the first rise in rolling sales since 2012. let's break as a part into regional constituents. you see 1% for the whole entire world. in terms of regional constituents, they all fell across the board except for one, asia-pacific all the way on your right, up 46%. north america down 13%. latin america down even more in terms of sales of machines. europe, africa, middle east coming in about flat, -3%. i want to bring it back home to asia and asia-pacific. komatsu in japan is now seeing these numbers. in terms of asia-pacific numbers, they are seeing a bump in their shares right now. up by 2.2%. they had been higher by 2.4% earlier when they just started trading. is interesting, the ceo of caterpillar mentioning china seeing significant

improvements and contributing to that jump in the region. but we speak with the mining industry? ramy: if we are seeing the pop in terms of the etf, we are seeing the rise from the beginning of 2016 through 2017. this is the x and eight etf -- xme etf, and you can see it has been falling in terms of what has been happening with machine sales you're looking at komatsu up i .8%. there we are, spider s&p metals is for the past five years down 37%. but you can see in 2016 the nadir there. but sales for caterpillar have happened as those that happened. construction in china has been one of the biggest list for liftsillar -- liftsa --

for caterpillar. construction projects rose to a record number. construction is clearly what is driving the boat here. if you see this trend, you could see a recovery in metals and mining as well as in construction stocks. betty: thank you. ramy inocencio joining us from new york. reliance industry has posted a record fourth quarter profit. that is happening -- helping the ambitionsankroll his in other areas. let's get to our chief international correspondent for southeast asia. it has been a good quarter for reliance. >> quite a quarter. net income 1.3% up. profit for a chemical

company surging 27%. this standout is the refining $11.50 a barrel. this is the big surprise, the ninth consecutive double-digit margin. the company is confident he can stay at double-digit increases going forward. for reliance.ness it has the biggest oil refinery complex in the world. can solid numbers, it pursue new businesses like retail, telecom. telecom in particular has been tricky, it is so competitor. offering cheap phones and free mobile services to its customers to establish itself. the concern in the market is that it will take a long time to cove the outlay. an estimated $30 billion already pumped into the venture. you can only hope and that on mobile and that it will pay off. yvonne: that is right. thank you. joining us from singapore on

those reliance earnings. more to come on bloomberg television. you are watching "daybreak asia." ♪

yvonne: this is "daybreak asia." i'm in hong kong. betty: i'm in new york. president has put together an infrastructure commission to look at how to accelerate building in the u.s.. he has promised a trillion

dollars in infrastructure spending. who put to a ceo together an infrastructure investment company with magic johnson. they are pledging to spend billions of dollars on u.s. roads, airports, bridges, tunnels. he also pointed out how overseas markets are much more advanced in using private money to complete infrastructure projects. >> state and local governments are starting to reevaluate what their role is. is it the role of the state and local government to own every building that they have offices in? every parking lot downtown? all the roads? the bridges? the airports? the terminals? or is it their function to provide their citizens with police, fire, schools, safety, public parks.

why is it that state and local governments need to own all of these things? one of the things that magic johnson and i saw when we look at the infrastructure space, the growth in this space, but also the comfort level that we started to see now with many of the projects that have been done. we -- year to date, we more than doubled what was done all of last year. probably triple. statesare seeing approved legislation for infrastructure projects. it is a subject that is not political, not democrat, not republican, it is the basic needs of the citizenry. they are beginning to feel comfortable with private investment. they are starting to see actual private invement for the public. it cane a very good thing. i don't know how many of you

have been to -- if you have into heathrow airport in london, race or hand. .eathrow airport if you been to laguardia, race or hand. -- raise your hand. you notice the difference immediately between heathrow and laguardia. heathrow is private, private capital, private investment. it is they are to create a revenue experience. the country benefits from that. betty: we have heard many times that people compare laguardia to a third world airport. it was also interesting about the whole conversation on the panel is that many of them gave kudos to infrastructure in other parts of the world, whether in china, australia, canada. there is much more advancement on using private and public .oney to build infrastructure

australia was quoted quite a bit because they are selling off assets to private investors. that is something that perhaps the u.s. should be doing as well and should accelerate that as well. trump'syou mentioned dollar plan. we are expected to hear something soon. they talk about the issue about the barriers. they said the barriers that prevent public private partnerships must be removed and try to eliminate some of the red tape when it comes to some of that. of that money to infrastructure. a great panel there. that's almost a press here on "daybreak asia." l's look at what is coming up overhe next few hours. what are you watching rishad: it is special. we are looking at the pboc and what they might do with the markets and trying to rein in

some of the speculation. we see the chinese markets take a hammering in recent days. looking at what happens in terms of inflow this at. . -- in terms of inflow disappearing. betty: what guests are coming up? ceoad: we have an airline joining us in an hour in 20 minutes. and what is happening with the turkish leader and how it affects business. we will talk to a chief investment officer heavily in fin tech. ♪

haidi: and is 9 a.m. in hong kong, 11 a.m. in sydney. i'm haidi lun. rishaad: i'm rishaad salamat coming to you from bloomberg's asia headquarters in hong kong, this is "bloomberg markets: asia." ♪ haidi: asian markets extended gains sparked by the french elections. the euro holding onto the biggest advance since june. rishaad: demand for chips, as k high next get the best results